Tuning in to NAFTA

By Donella Meadows

“I have to admit, I’ve tuned out the whole discussion about NAFTA,” said my neighbor, who is not in the habit of tuning out discussions. “It all seems so complicated.”

“Here’s a good introduction,” I said, handing her Ross Perot’s book Save Your Job, Save Our Country. She looked at me as if I’d gone crazy. “I should learn about this subject from ROSS PEROT?”

Don’t believe everything in that book, I told her. But don’t believe everything the other side says, either, with its millions of dollars of propaganda. Read Perot for balance. His summary of NAFTA is as good as any I’ve seen.

My neighbor started peppering me with questions, the questions I asked too, when I decided to tune in to NAFTA.

But isn’t free trade a good thing?

Free trade is good for traders. It may or may not be good for anyone else. It can be good if it is balanced; if it simplifies cross-border bureaucracy; if it spreads better technologies and higher production standards; if it is based on a market with undistorted prices and strong regulations about monopoly, labor rights, and the environment; and if it gives nations a greater interest in trading than in warring.

NAFTA meets few of those conditions. It doesn’t even fully free trade. (U.S. sugar and Mexican oil remain protected, for example.) NAFTA is a complex agreement crafted for the good of particular industries, not for the good of the people or the environment on either side of the border.

But what about the economic growth and new jobs it promises?

The numbers you hear about how many jobs will be created, or how much more economic activity there will be, come from the kinds of computer models that routinely fail to predict what’s going to happen to the economy. The NAFTA models are riddled with dubious assumptions. Perot says flatly, “These mathematical model studies are worthless,” I’m a modeler myself, and I’d say it differently. Economic models can be used to crank out whatever results the people paying for the models want.

The question isn’t whether NAFTA will produce growth or jobs, but growth of what and jobs for whom. That’s where there are problems.

Why?

Because NAFTA is not so much a freeing of trade as a shifting of power — away from democratic government at all levels and toward large corporations. NAFTA allows policies about workers’ rights or the environment, which you can now hope to influence at the level of your town or state, to be overruled by a three-nation commission to which you are not invited. Communities in the U.S. and Canada are already in competition to attract or keep jobs by bargaining down taxes, wages, and environmental regulations. NAFTA will let Mexico in on the competition.

But hasn’t Bill Clinton strengthened the environmental and labor requirements of NAFTA with the new “side agreements?”

I’ve got the side agreements right here. They’re full of nice, toothless words like “shall encourage,” “shall develop recommendations,” “shall promote and facilitate cooperation.” They set up a mechanism to make each nation enforce its own labor and environmental laws. They do not require those laws to be equally strong, nor do they prevent them from being weakened. They are much too feeble to fix NAFTA.

Can’t trade be used as a wedge to raise environmental and labor standards?

Yes. That’s why six major environmental groups now support NAFTA. They hope that over time they can apply pressure from within to improve some of NAFTA’s weaknesses. It’s a calculated risk, which is only open to large (and, as a consequence, partially corporate-funded) organizations. Dozens of grass-roots environmental groups, who don’t stand a chance of playing international power games, oppose NAFTA.

What about the argument that jobs won’t move to Mexico because they’ve already done so?

They’ve already done so only in the border zones that have been open to tariff-free imports of parts and exports of products. Those zones are now stuffed with maquiladora factories of U.S. companies, paying paltry wages and openly dumping toxic wastes. NAFTA would open all Mexico not only to maquiladoras, but beyond manufacturing to economic activities from trucking to banking. Hundreds of U.S. corporations are on the verge of moving to Mexico.

Wouldn’t NAFTA help clean up the mess made on the border by the maquiladoras?

It would, at taxpayers’ expense. This use of public funds to clean up private pollution is a good clue to who drafted this agreement, for whose benefit.

Would NAFTA reduce illegal immigration to the U.S.?

The 500,000 jobs already created in the maquiladoras have certainly not stopped the flood of migrants. Real development that raises the opportunities of the poorest people in Mexico would do that, but the current NAFTA is designed to enrich the rich, not help the poor. It probably won’t make a big change in migration — but in truth no one knows.

So should we oppose more open trade with Mexico?

No. We should oppose this NAFTA and ask for a better one, written in a process open to everyone, understood by everyone, and structured not for the short-term benefit of some corporations, but for the long-term benefit of the people, economies, and environments of both countries.

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The mission of the Donella Meadows Project is to preserve Donella (Dana) H. Meadows’s legacy as an inspiring leader, scholar, writer, and teacher; to manage the intellectual property rights related to Dana’s published work; to provide and maintain a comprehensive and easily accessible archive of her work online, including articles, columns, and letters; to develop new resources and programs that apply her ideas to current issues and make them available to an ever-larger network of students, practitioners, and leaders in social change. Read More

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